Timing of pension contributions

edited 14 October 2022 at 7:26PM in Cutting tax
RunninglapsRunninglaps Forumite
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Sixth Anniversary 10 Posts Combo Breaker
edited 14 October 2022 at 7:26PM in Cutting tax
Hello all

Sorry about another post around the £50k tax/child benefit marginal rate issue but I have a question about timing of pension contributions and NI, and I want to see if my understanding is correct.

Rough numbers are:

salary £40k
Salary sacrifice pension currently 5% so effective salary £38k.
BIK: £3k
october bonus £11k

likely march bonus £5k - £15k

bonus doesn’t automatically have Pension contributions applied though I can sacrifice it.

so given March bonus will have high marginal rate because of tax and CB charge I want to put more into my pension. And am happy to have overall annual earnings of £50k in salary.

in my head if I sacrifice some of each my bonus’s  I save the tax plus the child benefit plus 3.25% NI.

if I sacrifice the same amount during normal salary’s months I save the same tax and child benefit amount (as they’re annual) but 13.25% NI.   Because NI is on pay periods this doesn’t get amended later.

apart from the uncertainty of not knowing quite how much the bonus will be yet (though I’ll have a better idea for at least Jan and feb) is it better to sacrifice more in the normal salary months, or am I missing something?

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